Are ESM Welfare Organisations under any Scanner

All the non-profit and State welfare organisations must utilize 85% of its income in any financial year (1st April to 31st March) on the objects of the organisation. In case the organisation is unable to spend 85% of its income in the previous financial year due to late receipt of income or any other reason, the trustees/ governing body may exercise the option to spend the surplus immediately within subsequent 12 months. Surplus income can also be accumulated for a specific project, for a specific maxium number of years, as prescribed. The funds of the organisation are deposited according to the forms and modes specified u/s 11(5) of the Income Tax Act. Many organisations resort to spinning/ parking money in the Banks and circumvent the intended purpose.

We see so many ESM Welfare Organisations in the Public domain, but sadly none of them spell out their welfare activities in monetary terms and indicate precisely who benefits from these organisations in real terms. The audited accounts are not displayed in the respective websites violating the basic principle of transparency.

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